Product Profile: Acetone

Europe has been relatively buoyant this year. But lurking in the shadows are the problems of a possible glut in capacity and the potential loss of its use in MMA

Uses

Acetone's main use, accounting for just over a quarter of total consumption, is in the production of acetone cyanohydrin, a feedstock for methyl methacrylate (MMA). The other major and fast growing outlet is in the manufacture of bisphenol A (BPA), a raw material for the production of epoxy and polycarbonate (PC) resins.

It is used directly as a solvent as well as in the manufacture of other solvents such as methyl isobutyl ketone and methyl isobutyl carbinol. Other applications include higher molecular weight glycols and alcohols and in the manufacture of pharmaceuticals and antioxidants.

Supply/demand

As a co-product of phenol production, acetone availability is entirely dependent on market conditions for phenol. European producers say demand for acetone in the first half of 2003 has been better than expected, and is up on 2002. Consumption into MMA is the main driver, with this sector performing quite strongly.

Demand into BPA was also good in the first half, but quarter three is weaker than originally forecast as global BPA and PC markets have slowed down with no signs of any improvement. The solvents sector is weak with demand slower than predicted.

Supply is said to be balanced with producers' stocks at normal levels. The usual import quantities have been arriving from eastern Europe, namely Russia, Poland and Slovakia. Strong demand and tight supply in the US and Asian markets have been pulling in European exports.

Rhodia's intermediates business has been renamed Novapex after its recent acquisition by Bain Capital.

Pricing

European contract prices to the MMA sector started the year at E590-640/tonne FD NWE, then picked up in February to about E640-680/tonne, and again in April/May to E650-700/tonne. Numbers then tumbled in quarter three as propylene feedstock costs dived by E100/tonne. Acetone contract prices in September have remained in the range of E540-580/tonne, but producers expect to raise levels in quarter four on the back of strengthening propylene values. Propylene contracts are being anticipated by some players to move up by E30-40/tonne.

Spot product is being offered to the market in the range E440-480/tonne FD NWE, having slid continuously from levels of E650-690/tonne in April.

Technology

Almost 90% of acetone production is via the cumene route where acetone is co-produced with phenol. The main process involves the reaction of propylene and benzene in the presence of phosphoric acid-based catalysts or, more recently, zeolite catalysts. Cumene is oxidised in the liquid phase to cumene hydroperoxide, which is then cleaved in the presence of sulphuric acid to phenol and acetone. About 0.62 tonne of acetone is produced with each tonne of phenol.

The isopropyl alcohol (IPA) route, where the alcohol is dehydrogenated to acetone over a metal, metal oxide or salt catalyst, has been declining. Small quantities of acetone are also produced in the manufacture of propylene oxide (Lyondell), acetic acid (Eastman Chemical) and hydroquinone (Goodyear). A newer process in Japan is the direct oxidation of propylene, but it suffers from corrosion problems and high capital costs.

Health and safety

Acetone is a clear, colourless liquid with a fragrant odour. It is highly flammable and reacts explosively with strong oxidants. Vapour has a slight narcotic effect and high concentrations can irritate the eyes, nose and throat. Excessive exposure can lead to nausea, dizziness and drowsiness. Aspiration into the lungs can cause severe damage.

Outlook

European demand growth is forecast at 2.5-3.0%/year, driven mainly by BPA. The MMA sector is mature with growth reflecting GDP rates. Consumption into solvents will remain weak.

Most new investment is targeted for the strong growing markets in Asia, and China in particular. Capacity in Europe will rise if planned phenol debottleneckings at several plants proceed.

There is concern that future world demand will not grow sufficiently to meet capacity growth. However, players believe production will be adjusted progressively and that capacity, particularly that based on the more expensive IPA route, will be reduced.

The use of acetone in MMA could be threatened by emerging technologies using isobutene or ethylene. However, any impact is not expected before 2010 at least.

European Acetone Capacity, '000 tonne

Company

Location

Capacity

Borealis

Porvoo, Finland

80

BP

Hull, UK*

65

Domo Caproleuna

Leuna, Germany

90

Ertisa

Huelva, Spain

230

Ineos Phenol

Antwerp, Belgium

260

Gladbeck, Germany

397

Novapex

Roussillon, France

65

Petrobrazi

Brazi, Romania

47

PKN

Plock, Poland

21

Polimeri Europa

Mantova, Italy

186

Porto Torres, Italy

12

Shell

Berre, France**

75

Pernis, Netherlands**

80

Stanlow, UK**

40

Ufaorgsintez JSC

Ufa, Russia

46

* from acetic acid

** from isopropyl alcohol

Source: ECN/CNI

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